News Release

WASHINGTON - U.S. Rep. John Spratt (D-SC) said today that China’s decision to revalue its currency was a “good first step.”

“I am pleased that China has decided to unpeg the yuan to the U.S. dollar and link it to a basket of world currencies.  But this is just a start,” Spratt said. 

On Thursday the Chinese government announced that it would let its currency rise in value as much as 2% initially.  The yuan had been trading at a ratio of 1 yuan per 8.28 dollars.  This new change makes it 2.1 yuan to every 8.11 dollar.  The Chinese signaled that further growth can be expected, within a limited band.

“This small percentage change is not enough to affect our $162 billion trade deficit with China,“ Spratt said.  “But I am pleased to see the Chinese begin the process of letting the yuan float in the open market.”

Spratt, along with Rep. Sue Myrick (R-NC) are main sponsors of a bill in the House aimed at stemming the rapid surge in textile imports from China, by forcing a significant revaluation of the yuan.

Spratt and Myrick's bill, H.R. 1575, would levy tariffs of 27.5 percent on goods from China if the Chinese government does not allow its currency to float on the open market. For several years, China has maintained a devalued currency in order to gain a greater trade advantage.

"The Carolinas have lost the highest percentage of manufacturing jobs in the nation," said Spratt. "If we do not level the playing field for our manufacturing firms, we are going to lose the sector and some of the best jobs in our economy, plus the ability to make goods."

China's currency is undervalued at between 15 and 40 percent, or an average 27.5 percent, estimates say. As a result, China's exports to America are cheaper and America's imports to China are more expensive. The currency manipulation has aggravated the U.S. trade deficit and cost millions of American jobs.

Spratt and Myrick's bill mirrors a bill introduced by U.S. Sens. Charles Schumer (D-NY) and Lindsey Graham (R-SC). The Senate voted this spring, 67-33, to consider Schumer-Graham as an amendment to the Foreign Affairs Authorization Act. Spratt and Myrick first introduced the bill in the last Congress.

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